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New price transparency act stirs up debate in cattle industry

Progressive Cattle Editor Carrie Veselka Published on 24 November 2021

Several events over the last few years, including the Tyson fire in 2019 and the supply chain issues following the COVID-19 outbreak in 2020, have drawn public and political attention to the issue of price discovery in cattle markets.

U.S. Sens. Chuck Grassley (R-Iowa), Deb Fischer (R-Nebraska), Jon Tester (D-Montana) and Ron Wyden (D-Oregon) announced a “compromise cattle market proposal” – the Cattle Price Discovery and Transparency Act – on Nov. 9 to enforce market transparency.

The legislation will, among other things, establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades, thus requiring packers to procure a certain amount of cattle from the cash market, require the USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality, prohibit the USDA from using confidentiality as a justification for not reporting and require more timely reporting of cattle carcass weights, as well as requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

The bill’s announcement has drawn mixed reactions from beef industry shareholders. “The Cattle Price Discovery and Transparency Act will deliver on its promise to restore robust price discovery and provide market participants with the information they need to make savvy marketing decisions,” U.S. Cattlemen’s Association Region 7 Director Lee Reichmuth applauded. “Reforming the cattle marketplace to drive transparency and true price discovery is a core tenet of how we can strengthen the U.S. cattle producer’s bottom line.”

Other groups are wary of inviting too much government oversight into the cattle business. “Beef and cattle markets are dynamic. This fall, prices cattle producers received for their livestock have risen without any government interference,” said Julie Anna Potts, president and CEO of the North American Meat Institute. “In a rush to do ‘something,’ this bill would replace the free market with government mandates and harm those it is intended to protect: livestock producers.”

Other groups are reserving judgment until more is understood about the new bill. “While we are still reviewing the new language and comparing it against our producer-passed policy on this issue, it would appear that – as in previous versions – we can support much of this bill. That being said, that same policy book directs us to oppose government mandates on cattle marketing methods. We take the discussions and deliberations that go into our grassroots policy process seriously, and we will hold this bill – as we would any other – up against the policy of this association,” said National Cattlemen’s Beef Association Vice President of Government Affairs Ethan Lane.  end mark

Carrie Veselka
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